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Hey there freedom fighters, my name is Andrew Warner, I’m the founder of Mixergy.com, home of the ambitious upstart. And imagine this, you’re ambitious, you decide you want to put a new business up. And so you quit your job to start a company. When you do, your boss laughs and says, huh, I bet you’re going to fail. Well, that’s pretty much what happened to today’s guest. And 10 years later, he has the last laugh, because here he is doing an interview with me about how he built a successful company. Devon Dickinson who you see up on your screen, is the founder of Safety Services company, which he started with little more than a card table and a phone, and turned into a multi-million dollar safety training and supplies provider. I invited him here to talk about how he did it. Devon, welcome.
Devon: Thank you. It’s great to be here. I’m really, really excited, a little nervous. But excited.
Andrew: Well, thank you. What were your revenues last year? I might as well ask you while you’re still in that nervous state where you might answer everything.
Devon: So, at the end of last year, we closed out booking 28 million.
Andrew: 28 million in 2012. 2011 according to my research, 16.5 million. Is that right?
Devon: Slightly over, it was pushing 18.
Andrew: Unreal. This growth in this company.
Devon: Yeah.
Andrew: And you started with how much money?
Devon: $5,000 on a credit card. [laugh] And some change we found in our ashtray.
Andrew: Literally actually. As people will see that ashtray story is true, right?
Devon: Yeah, it is. [laugh]
Andrew: You went to your boss, and did he really bet you?
Devon: I had a great relationship with the guy. I don’t mean this negatively towards him, and he really had a lot of compassion towards me. He was honestly just worried about me. So, he took me out to lunch and we sat down. He said, “Hey I’m really sorry that you’re leaving, we really want to keep you. I just told him, “Listen, I’ve had a dream of becoming an entrepreneur, I believe I can do it,” and he asked me what my idea was. It was a terrible idea at the time so he was right with that. He goes, “I bet you a buck that you’ll be back within a year.” Next time I run into him I’m going to have to break his kneecaps and collect on that.
Andrew: [laugh] You did always have this entrepreneurial vision. In fact, was there a newspaper that you started with your wife?
Devon: So, actually it was with my college roommates. These guys were buddies of mine ever since we were in high school, we did everything from painting numbers on curbs, to mowing lawns to sealing asphalt driveways. The funniest of the stories was, I always say I have 10 ideas a day, only 1 of them is good. Well this was definitely not one of the good ones. We had this idea that we were going to put peepholes, the little thing that you look through in doors, to make money over the summer to make money. We called ourselves the peephole people. That was definitely one of the not good ideas.
Then in college we got together and started a newspaper. It was just starting to take off, we were delivering pizzas at night to pay the bills and make sure we were able to eat. During that time, my fiance at the time got into a car accident. She was not able to take care of herself for a little bit so I dropped out of school. That dissolved that company. But it was also an important time in my life too, because I realized that I didn’t know much about business. I was really ambitious. That’s when I decided it was time to enter corporate America for a little bit to get feet on the ground, hands on experience working in business day after day.
Andrew: And so what did you learn by having your feet on the ground working in business day after day in a real company?
Devon: I worked for Enterprise family owned company, but just solid work ethic. You know, during this time I got lucky, because during that time I set up corporate accounts. So, for about four and a half years, all I would do every day would be go meet with business owners. So you would find out how they run their company, all the ins and outs of it.
To me it was just fascinating. It was a dream job, I loved it, got to learn a ton, but you know I got instilled what it was like to wake up at 5 AM, be the first one in the office, the last one to leave. Make the cold calls, close the sales, do the paperwork, all of that that I think a lot of times entrepreneurs miss out on because they’re their own boss, and have always been their own boss, and so they miss that. For me it was really good to be able to grab that experience and that training of working in corporate America. I have nothing but great things to say about the company and the people.
Andrew: And you know what, and as we’ll see in a moment, cold calling was a huge factor in your success and I’ve noticed this a lot for entrepreneurs who I’ve interviewed, they take success into their own hands by picking up the phone and closing sales, and not waiting for them to come to them. It’s a way to take all that ambition and drive that you have, and actually do something that could grow your business, and they don’t teach you that in school.
You did learn it at Enterprise, what did you learn about cold calling that then you were able to do what we’ll find out later you did?
Devon: Yeah, so it was all phone work and closing skills. I think a lot of people, and I talk to people about this all the time, and you just touched on this, is that people have a great idea. They’ll have a great idea for a product, but if you can’t move that product, I mean, you’re literally a great idea sitting in the closet. Add it to the rest of the stack of great ideas.
Well, I’m going to tell you our idea wasn’t even all that great to start with, but I knew how to close business. And so during that time, I mean-
Andrew: But what did you learn about it? I’d like to become better at cold calling and here you were, and actually today I’d imagine, you’re a master of cold calling. Is there one thing you learned about how to get peoples’ attention quickly, about, maybe about who to call so that you don’t waste your time and feel bad about your presentation when you’re really great, but you’re calling the wrong people?
Devon: So the broad answer on that is to be able to understand people and to be able to get something that grabs their attention within the first ten…
Andrew: Grab their attention within the first ten seconds.
Devon: …they’ll say no. So I think that what you want to get a very granular answer, you can modify databases, you can do A/B testing on various scripts. You can get very, very granular, but the broad answer is to get something where within the first ten seconds you’re going to catch someone’s attention because they haven’t heard of that before.
If you’re going to call up and sell them another office machine or something, you’re maybe the third call that they’ve had that day. So if you’re going to call up and try an office machine, you’re going to have to give them a pitch that they haven’t heard before.
So maybe you want to call them up and say “Hey, I heard your office machine blew up the other day. I saw the smoke coming out the window.” And they’re like, “What?” You know, something that grabs people’s attention and at least gives them at least reason enough to listen to you for the next 60 seconds.
Andrew: I see. And then you might say, “Well, it didn’t yet, but if could because you don’t have one of ours.”
Devon: Yeah, aren’t you glad I called?
Andrew: All right. And this whole time as you’re learning it, do you still have the vision to be an entrepreneur? [pause] Sorry, there we go. We lost the connection there.
Devon: Yep.
Andrew: It seems to me like you still do have this vision that you were going to be an entrepreneur. While you’re working at this company, you’re arming yourself for the day when you’ll go do it.
Devon: That’s exactly right. The entire time I was there was just a learning experience that I would just log what I learned that day for future reference.
I knew I always wanted to use that as a springboard to go to whatever the idea was going to be that I was going to run with.
Andrew: All right, and you said earlier that your idea was a terrible idea. What was that terrible idea?
Devon: Yeah, so at the time I got offered a promotion in the company, and it was a great promotion, it was literally the job that you don’t turn down. It was going to be in the executive suites with the founders of the company. I mean, it was the dream job, but I knew that if I took it I was probably going to retire with that company for [??] years because this was something that you dream about.
So instead of taking the job, I turned it down, as I told you, but at the time it was literally I need an idea and I need it now.
Well, I’m combing through the newspapers and they had actually changed regulations and deregulated defibrillators, you know the things you start hearts back with, so anyone could have these in their home. So I thought I’m going to sell these to every company, every home, and I had this great idea I’m like. So this is when my boss bet me “bet you a buck you’ll be back”.
Andrew: Let’s wait for the connection to get a little bit better and I’ll ask you the next question. There we go, sorry the connection. Why is that a bad idea? Defibrillators save peoples’ lives, I think I saw it at a restaurant the other day, you see them at the airport. Why’s it a bad idea to take it and put it into the hands of a guy who can pretty much sell anything?
Devon: It was a bad idea at the time because it was literally just starting. People didn’t have, it wasn’t like they had enough knowledge out there. So, you first reaction is or when you talk about, hey, so what you want do is put this thing with ten thousand volts of electricity in your home and people heard liability. They thought, you know, wouldn’t it be better to just call 9-1-1. So, nobody wanted to be the first people. So, I think if it had two or three years down the line it had progressed and they started seeing them at Disney Land or seen them at the airports. Then all of a sudden the wave would’ve had enough momentum. But one guy in an ocean wasn’t necessarily enough to create the wave at the time.
Andrew: So, as an experienced sales person, a couple of months go by, how many of these defibrillators do you sell?
Devon: [Pause] Sorry, Andrew, I lost you there.
Andrew: Yeah. We’re having a little bit of an Internet issue here today. But I’m glad we’re able to make this work despite it. Couple of months go by, how many of these defibrillators were you able to sell?
Devon: [Chuckles] Well, let me see. Zero.
[Laughing]
Andrew: Nothing?
Devon: Yeah, zero. It was disheartening to say the least.
Andrew: So, what do you do next?
Devon: So, I’m on the phone with this guy and he says, yeah, you know we talked about it. It’s just too much risk, too much liability, hey we really like you. But, hey, why don’t you come out and do some CPR training. It’s the same thing, right? And my question is, you know, how much is does that pay? [Laughs] And it was above a dollar so I decided to take it. All of a sudden, [Laughs] I decided to go and figure out how to get trained.
Andrew: And so, you weren’t even trained in CPR but because this guy said he’d pay you to teach it. You said I’ll go get training?
Devon: [Chuckling] That’s exactly right. That’s kind of the methodology to our madness was. We kind of found out what people wanted and we would fulfill the need on the back end. And as we started training on CPR, they’d ask, how about forklift training? Can you do that? Then about OSHA training. Can you write OSHA Manuals? How about safety training? And thus, thus…
[Pause]
Andrew: Sorry. The connection did that thing again that it’s been doing. So you just kept expanding and expanding. You got your first customer. You go and teach yourself CPR and you collect your money. You see what it’s like to teach. How do you go from there to your second customer and so on?
Devon: At that point we were basically doing hands on training. What I wanted to do was figure out something that could mass market to the U. S.
Andrew: What about the second customer and the third before you go mass? Or are you immediately starting to think I got to go big and go all over?
Devon: No. In the beginning, the first year, it was literally just trying to get some cash flow going. Taking any training I could get. But, I knew that wasn’t a model that you could turn into an empire. Simply, I was just going to be a glorified consultant.
Andrew: So, the same way you were going to sell defibrillators, you now started selling training because you found one person wanted training and there must be others who could?
Devon: Absolutely. And if I could put something in their hands that was lost cost, couple 100 bucks, they can do it themselves. That’s a reproducible model.
Andrew: Right.
Devon: That is something you can mass market to the U-S. So, 200 bucks you’re not going to be able to buy your island in the Bahamas, but get a couple hundred thousand of those and you’re good to go.
Andrew: OK. So how to you spread it? What’s your plan for getting it all out there?
Devon: I knew phone work. Called up some friends and basically figured out a way to get a handful of people together. We started making calls. One after another, after another. Funny story of this is, they’re on the phone for a little bit of time. They’re working it and kind of discouraged. They’re like, Devon, we don’t know how to do this. I was like hold on give me the phone. So, [chuckles] this is a miracle, it really is. Really is a miracle because I’m not this good. I picked up the phone, dialed one number and got the person on the other end of the phone. And literally closed him in under two minutes. Slammed the phone down. It was just like out of the [snap] boiler room. All the guys go crazy. They were so inspired. They were like, we got something, we can make this happen. Don’t ask me to do that again?
[Laughter]
Andrew: What would you have done if you couldn’t close the sale with all those people watching?
Devon: You know I was completely ready to just inspire them and show them that we generate interest, but there was definitely rubber meets the road. I knew if we didn’t close something within a day or two that it was going to fizzle because the numbers don’t work out on it. And so it was OK, I went in believing that it was something that people needed, but (?)
Andrew: There we go. And so, was this product something that you could already sell for a couple hundred bucks and sell to anyone in the country. It wasn’t training that this group of friends of yours were working to help sell, right? It’s training by Devon.
Devon: Yeah. What we did is we began writing training out and offering a subscription that we would mail them their training.
Andrew: And they would have this packet and use it to train their people.
Devon: Exactly.
Andrew: Train their people to do what?
Devon: Whatever they’d need. That’s a funny question, right? When I first start selling it, we would tell people, “Hey, listen, we have a couple hundred different options of programs here. You can kind of pick and choose what you wanted, but the reality was we only had 15 at the time. And so, when people would say, “Hey, make sure you send me out something on – Oh, I don’t know – aerial lifts”, we’d be like, “Oh, yeah, yeah. I’ll send it out to you, but probably in about six weeks. It’ll be in the next month’s package.” And then I would frantically go back and write all of the material. So, as we sold it, people would tell us what they wanted, and from that we determined what the market desired, and we would back fill it. So, we sold it like we had it, and we would get it to them.
Andrew: And that’s how you would know what to create is on what people asked you and were willing to pay for?
Devon: Exactly.
Andrew: And you’d do training for things like aerial lifts? What’s an aerial lift?
Devon: Construction. I’m sure you’ve seen like the boom lift where it takes the person to the roof or to the second or third floor. You drop off the equipment there, or maybe window washers or people trimming trees.
Andrew: So you don’t have experience working with these lifts and all the equipment that you’re creating safety trainings for? How do you do it when you don’t have that kind of experience?
Devon: So when you said I don’t have experience, like I can literally barely put gas in my car. My wife always says, when the light bulbs go out in our house, I sell the house and get a new house.
Andrew: [laughs]
Devon: I’m not that guy that knows how to fix things or has ever really worked with my hands at all. So what we would do is luckily one of my guys had a background in it, so when I would say, “What’s an aerial lift,” he would explain it to me. Then we would look up the OSHA regulations on it, and I had the ability to write so I’m not a great writer but I can write. And so I would write the material, he would kind of go back and say, “Yeah, this makes sense.” And we’d check it against OSHA regulations and send it out.
Andrew: In addition to making OSHA regulations more readable and better written – I guess that’s the same thing – in addition to making it more readable, what else did you do to these trainings? Were you doing it in a way that people had tests? Were you doing it in a way that there is a teacher who would ask questions and then get answers, so it felt more interactive? What did you do?
Devon: We made it digestible. So instead of literally getting a book that thick on CFR regulations that nobody could understand, we would write them a five minute safety meeting in English and in Spanish. We translated it in Spanish. It would basically say, “Hey, when you’re on a job site it’s required to wear your hard hat. Oh, and by the way, sign here that you’ve been notified that our company told you to wear a hard hat, and that’s the safety regulations.”
Andrew: OK.
Devon: The employer loved it because they were able to say, “Listen, we’re doing everything we can to provide a safe work place for our people.” It was good for the people. They were getting the safety training, and you have the documentation so really it ended up being a dream. It caught on like wildfire. It’s actually called “Tailgate Toolbox Safety Meetings, and now people across the country in the construction industry just know that terminology. We kind of coined that phrase.
Andrew: How did making all those phone calls to customers show you that this is a product that would sell to them?
Devon: Yeah. So, in the beginning we had the initial idea but what I think you’re getting at is the more we would call, the more that they would ask us for some unique variances. And so, over the course of time we began developing more in-depth programs. A fork lift training program, you can’t do in a little five minute thing. So we began to tape video and shoot video and began making fork lift training programs, and those would obviously be a little more costly. We began writing manuals, so we began to develop this entire product line of safety training to really meet the needs of anyone and everyone in the industry and now it’s the largest in the country.
Andrew: What about this, Devon? That your first business here basically failed because it was a great idea. The second version succeeded because it was a great demand that created this business. How did those initial phone calls show you where that demand was? You told me where you found the first inkling of it where someone said, hey come in and train us in CPR. But as you had more and more phone calls you seemed to have learned what the product needed to be. It needed to be digestible training material, it needed to be something that people who signed, it needed to be something that was based on certain topics. How did those calls translate into a great business, into a great product?
Devon: Well one of the things I think that was super key in the beginning was it wasn’t just my people on the phone, I was on the phone with them. And I think one of the things because I was literally selling stuff since I was a little kid. I was always the kid that sold most candy bars for the soccer team and stuff like that. I began to get an intuitive sense of what people were really asking for. We entered into one of our greatest feats is the oil and gas industry which is just booming right now in the US. Well after spending time on the phone people would say, “Hey. can you take your manual but we only want these five sections.” And then you’re like, “OK, great. I’ll send that out to you.” And then you realize, “Wait, they didn’t even ask what the price was.”
Andrew: And that tells you, hey wait a minute, there’s a good customer there. If he doesn’t even need to know the price then, right.
Devon: There’s something there, right? And so from there we literally started this entire sector geared towards the oil and gas industry which was great, you know, but it was just having spent so much time in sales and with the customers you can understand that even though what they’re saying they’re asking for there’s a little bit more behind the scenes. And it was just fantastic to be able to uncover that. So I would always recommend that presidents, CEOs, whomever, they have to really get with the customers and understand the customers.
Andrew: Do you have advice for me on how to do this right? Because I’ve been hearing this a lot in my interviews. Talk to your customers, sell to them, or talk to your customers after they buy and get to know what their frustrations are, get to know what they love about your product, get to know what issues they have in life, and then you can start building those solutions and those delightful moments into your product. I have tons of conversations with my customers but I don’t feel that they’re productive enough. I feel like we have this great conversation but I don’t learn that thing that creates a product as great as yours, and now you’ve built a multi-million dollar business based on.
Devon: Well I think one of the things, and this is a frustrating thing for me, is the negative, right? So what we don’t ever like to hear is we don’t ever like to hear the negative. All we want to hear is the positive and see all the good. But in order to really to be able to correct the problems you have to listen to the negative and you have to be willing to deal with the negative, and contrarily you’d say, hey you know what, what are you guys working on right now? What’s your greatest need. And especially now where we were literally (?) to step out on paper and manuals and books like that, now all of a sudden our customers are, as we’re talking to them they’re saying, hey we want this so we can have it on our tablet. And so you know you start to go, alright well how much is there? And again the problem is you can’t be everything to everybody. And you also have to know and discern what to listen to that’s positive and what to listen to that’s negative.
So we had 200,000 customers so we would get tons of complaints and so it’s all over the Internet, all of this negative stuff about us. And it was so difficult for me emotionally to see all this negative stuff and I’d do, wait a second I got 200 complaints last year, but we did 65,000 transactions over the phone. And so it’s always difficult to say, you know what I have to listen to the negative because I need to take the negative and make the changes that I need to make. At the same time I can’t let the negative consume me and so drastically change our business so you overcorrect. I think a lot of times people do that in business where they’re driving along and they need to correct but you overcorrect and you flip the car.
Andrew: Do you have an example of some negative feedback that might have been hard to hear but led you to create a better product and a better business?
Devon: Yeah, so I had some area where we were dealing with this where the BBB, the Better Business Bureau, had gotten involved. And they were coming against us and said some nasty things, gave us a nasty rating. I was like, you don’t understand. I did 65,000 transactions. You’ve got to weigh out what’s going on here. And they listened and so we’re working through some of that. But the problem was is to me it was so emotional because I felt like, man we worked so hard here, our people are so great, our customers are so great, we need to make sure that we never, ever, ever get a single complaint. And so during the process of this I started to try to put the measures that were so drastically changing our company, because remember we do things over the phone. I mean to get that right a hundred times is darn near impossible, you know? And so I was talking to a friend of mine who’s been in business for years and he said, Devon you’ve got a beautiful model, you’ve got a beautiful company. And he kind of talked me off the cliff because I was just about to put in place measures that were going to drastically change everything we were doing, change our entire business model.
Andrew: How, what’s an example of something so Draconian that would have slowed your business down or change it completely and gotten you, to use your analogy, off the road?
Devon: Yeah, we were talking about literally shutting down outbound calls and trying to go exclusively to an Internet or something like the Internet. And he’s like, no what you have is beautiful. Make some changes if you have to make some changes but don’t overcorrect.
Andrew: Right.
Devon: It was the right word at the right time and I really needed to hear it.
Andrew: And suddenly you’re in a whole new business because you’re in Internet sales….
Devon: Absolutely.
Andrew: …and you haven’t mastered it yet. What percentage of your orders come in still from the phone versus Internet?
Devon: Oh, I would say we’re probably 85%, 80% over the phone.
Andrew: Over the phone. And you decided to sell your service on a subscription basis, why subscription?
Devon: Well I love re-ocurring revenue and advice to entrepreneurs out there is if you can find something that has re-occurring revenue, obviously not everything does, but if you can, I think a lot of times people thing, oh you know I’ve got two or three customers. And I learned this back at Enterprise where people would go and they would try to get those two or three sweet customers that paid the bills year in and year out. Well if you lose one out of three you’re down 33%. Whereas if you have 200,000 customers, you lose a thousand it’s not even showing up on your radar. So re-occurring revenue, spreading out getting lots of customers, I think it’s a great model. And so we work that and our re-occurring revenue has, as I’ve started other businesses I’ve always made that model and so far it’s been right, so.
Andrew: What about the idea that with subscription based models people see you on their statement month after month and if you’re in the construction business and they have a hard month they’re going to look to start slashing everything that’s not just a bill today but if it’s coming up in the future afterwards, versus if you were to charge them all at once, they can’t undo that.
Devon: Sure, but what happens is the likelihood that the next year, because it’s going to be a significant bill, of them saying no to two hundred versus you know a moderate, you know. And plus the other thing is we do get people that say no and cancel all the time. Well I don’t consider that a dead customer I just consider it dormant, sleeping. And so we want to let that customer lay low for six months and if they are still in business six months from now then they’ve probably corrected their own company enough so that they’re back on track. And so then I’d like to come back around six months later and tap them on the shoulder and say, hey, it’s time to get going again.
Andrew: One thing I’ve discovered in these interviews is that subscription based models do best when something in your customer’s business or life breaks if they stop subscribing. So if you are selling a, in my guess I’ll use Wufoo for forms on my sight. If I stop paying Wufoo $25 bucks a month all those forms that I’ve buried all over the site that I don’t know where they are going to break, they’re not going to work. So I have to keep paying Wufoo. Now I love them, but if ever stop loving them I’d have to keep paying them. And there are services like that that I keep paying. Do you have anything like that where something goes, where the business is measurably worse and damaged for not being a customer any more.
Devon: You know I don’t think the products that we’ve provided have been enough drastic change where it would cause the company to go down. But what does happen is there’s the compliance component. So imagine that you did have something go wrong, you had a lawsuit, you had an accident, somebody gets hurt. You kind of have that business owner in the back of their head at night when they put their head on the pillow, what are they thinking about? Oftentimes, they’re thinking about how am I going to get sued? So if you’re able to say, hey listen for a few bucks a month to be able to have some piece of mind, they’re like. And so I wouldn’t necessarily say something is going to break but they’re going to give away some piece of mind if they didn’t use our tools.
Andrew: It’s like not paying your insurance. Nothing stops working but you’re really under protected and could get hurt. So earlier in the interview, you said that you had to really find cash everywhere in order to make this business work and you said even in the ashtray and I said I heard that was true from Jeremy, our producer. When did that happen and what happened exactly?
Devon: Yes. So we were in the first 6 months to a year and cash was so tight. I remember literally praying as I’m walking to the mailbox Let there be a check there because I need to pay the bills, I need to do payrolls, I need to be able to put gas in the car.
Well, we also had as you pointed out, a subscription so we mailed the material monthly and at the beginning we just simply weren’t sophisticated enough, didn’t have a mailroom so we, me and my wife literally stocked in envelopes and literally licking stamps. Well, we’re at the post office and, I’ll never forget this day, it was dreary, it was raining, I was starting to really question myself and we had run out of money for postage and I had two of three more envelopes to send. And so we had to dig through the change in the ashtray and literally go in and put money in to get enough stamps to be able to send out the mail.
And to me it was a really, really difficult day. But, you know, it’s funny. My wife, you know, was like right there alongside saying Oh, isn’t this great? Isn’t this fun, you know? I’m so happy for you, I’m so proud of you. And really, you know, she encouraged me, even during that never stopped believing in me and so that was huge, huge for me. And it was a turning point where that would have been one of those days that I would have quit but she believed in me and kept going. I would have blown the dollar in [??].
Andrew: You know, listening to that story is great for me because it shows my audience Hey, I’ve got a rags to riches story for you. Look at how far he’s come. But when I experience something like that, someone in the audience is experiencing something like that it doesn’t feel like it’s going to be a great story. It feels like you are a failure. All these other people are making things work and you can’t even pay postage.
At that point, I know having a wife helps and we can see how. What else do you do? What else do we do to get past that insecurity so that we can build the company that you ended up building?
Devon: Yes. Well, you mentioned the spouse and I always thing that it’s very important that if you are going to go into a business that you have to be aligned as a family. And both sides need to know about the rags part, not the riches part. The riches normally take care of themselves. But you need to be aligned, mutually aligned in the fact that you know that this is going to be rough and you have a plan to get through the rough times and you both believe in it. If you don’t, it’s just really hard. I’ve seen it tear families apart, it’s really difficult.
Andrew: You need to have both people be on board and say Hey, we’re going to have these tough times and are you in it with me. Not I’m going to do this and I’m going to carry her and I she’ll kick and scream for five years but then later on she’ll be grateful. It’s in there together.
Devon: Yes.
Andrew: [??] to be in there together.
Devon: So I think it’s important that you have very real conversations. When people and other people start to talk about starting a company, they’re always like Oh, yes, and then we’ll make this much money, we’ll buy this yacht and we’ll get our place in Colorado. And that’s what they’re talking about. What they really need to be talking about is how are we going to pay for health insurance and you’re pregnant. You know, that’s the questions that they need to talk about before they get into it. But a lot of times people talk about starting a company or a business and they talk about this angle when really they need to be talking about the reality of those first two or three years. How are we going to make it, who’s going to do what, are we in it to win it, how far are we willing to go in, you know. Are we going to put our house up, are we willing to put our credit up? How deep. And those are the conversations that people have.
Andrew: Where you guys willing to put your house, your credit, your everything?
Devon: Yes, we put up everything. We shared a car at the time. I’ll never forget that some of my friends came over and they came to our house. We were so proud of that we had bought a house. And they were like looking around, they were like Where’s all the furniture? And we’re like Can’t afford it. Have a seat on the ground. We’ll order in some pizza and they’re like Devon, you can probably afford nice and well. Maybe I could but not with what we’re doing right now, not with what our end goal is and our end goal is to build this empire and so we need to put everything that we possibly can back into it. And so that was just kind of a picture of our lives at the time.
Andrew: And it was going to be an empire. How do you stay connected to that dream, that vision when all around you, you’ve got no furniture and coins in the ashtray are paying for your office expenses. How do you stay in touch with that vision?
Devon: Well, I think it’s important. Everyone talks about goal setting, but I think more important than the goal setting is to understand the scoreboard that gets you to the goal. That scoreboard needs to happen on a daily basis. I’m always shocked when people are like, “My company went down the tubes on me.” “What do you mean it went down the tubes?” It’s a daily scoreboard. It’s not surprising that it’s gone, you know what I mean?
And so, with us, even though I knew I had barely enough change in the ashtray to send out the money, I knew on a daily basis we were winning the victory. We were winning on Monday. We won on Tuesday. Maybe, we win a little back on Wednesday, but on Thursday we did good. On Friday …
Andrew: What was the scoreboard? It was the number of sales over the phone?
Devon: Sales, yeah.
Andrew: Gotcha.
Devon: People lose that. All of the time they start to think, they start to focus on other things when it’s like, “Wait, this is the front end. You have to fill the top of the hopper up. You have to bring in customers. You have to fill the top line. And so, day after day after day after day I would measure that top line. I knew we would had the empire, but we would only have the empire by winning the scoreboard every day.
Andrew: Was there ever a time when the sales went down and you had to do something to correct?
Devon: Yeah, obviously, in ’08 when everyone kind of get slapped upside the head. You heard me say that we were primarily instruction. Well, at that time, literally overnight … When I say over night, we grabbed the company by the horns and we modified our approach overnight. We started selling other products outside of construction into other markets, and it was literally … Imagine your primary construction or your primary business base being contractors, in 2008 it was devastating to so many people that I knew, that actually from ’08 throughout the recession or whatever people want to call it, we actually grew during that time. I would never allow anyone in my entire office. All of our employees, all hundreds of our employees, we had run around. We were never allowed to say the word, recession. We were never allowed to talk negatively about the economy. It was just not what we did because I said, “If this is what the newspaper says, if this is what the headlines say, that’s fine. That’s fine for them, but that’s not fine for us because look at our score yesterday. We won yesterday. So I don’t care what that says, we’re still winning.”
Andrew: And everyone got to see the scoreboard. They all knew what the sales were.
Devon: Every day. I was very transparent with the dollars and cents.
Andrew: Weren’t you afraid that someone would say, “This guy, Devon, is an ordinary person. I see him every day. Look at the big scoreboard up there. What are we sending out? I could probably do that. I’ll go and compete with Devon.”
Devon: Yeah. And so, we had that happen a couple of times. A few people did it. As I have kind alluded to, that first two of three years is a rough cash flow. And so, for people who have done that and replicated the model, if they were actually smart enough to figure out the numbers on the board, they were also probably smart enough to figure out the cash flow that they’re going to have to … the price that they’re going to have to pay the piper for a couple of year out.
Andrew: I imagine, while they’re suffering through those couple of years, you’re growing and now you’re in a whole new place they have to compete with after months and years of devastation.
Devon: Yeah.
Andrew: You said at the top of the interview that you had tons of ideas, ideas for peep holes that you were going to sell door to door and let people get peep holes on their doors, newspapers, et cetera. How does a guy who has all those ideas stay so focused on one, that you’re able to deliver the promise of this one company and then grow it and grow it and grow it?
Devon: Well, the scoreboard helped me because I’m very competitive. Even though I’d have other ideas, it was always fun to win.
Andrew: I see. And it was always fun to see that one scoreboard up. OK.
Devon: Yeah. You know I was good at maintaining focus on that, but I would say that the biggest problem that I had, my biggest fault, is that I can easily get distracted. If I had to do everything over again, I probably would have tried to maintain a little more focus because I would always be playing around, probably when I shouldn’t, make a change just for the sake of change. But over the course of ten years, it got to the place literally where I believe the company can go to a hundred million, and I know we’re going to go there. We actually have the plan to get there, but it got to the point where it needed more focus than I was willing to give it. So for me this last year went through and had maybe, 15 suitors. I landed an equity partner to bring in capital and also to bring me into a different cash position. So I could take chips off the table.
Andrew: Mm-hmm.
Devon: Also to bring in some real strong heavy management that would be able to give 100% focus, so that I could actually go and pursue my dreams. My dreams are all these other hair brain ideas I have.
Andrew: You had to put all those on hold to keep that number going up, and now you got some cash, and some management in so you can do it. Let me ask you this.
Devon: Yep.
Andrew: Speaking of that. Barbara Corcoran, of the Corcoran group in shark tank, told me about the day she, didn’t get a check when she sold her company. She did go to the ATM one day. She said “Huh, I think it was $56 million.” So I’m like, that, there was that one day that she realized this is true. Did you have a day like that? When you looked down at something and saw it?
Devon: Yeah, Somebody, a friend of mine. I was on the phone, and the day it happened. Only a couple knew what was going on. The day it finally happened he goes, it is funny to say. He goes, “Wow, you are like officially rich”. I never thought of myself like that way, I am not that guy. He said “in anybody’s book you are”. I was like, I was sitting in my driveway, and just sat in my car few minutes. I was like really moved. It was was an emotional experience, so it was kind of, I hope you have that someday. I hope you have it.
Andrew: I hope everyone in the audience gets that someday.
Devon: Absolutely.
Andrew: It’s not just that, for me by the way I did have that. It was on the phone. I called up Citi Bank, over, and over and over and over. You know how that automated machine?
Devon: Yeah.
Andrew: You also, because of this, I want to say that it’s not just having money in the bank. It’s about what you get to do with it. You’ve gotten to do a lot with it. Can you tell people about that trip to Indonesia, and what you were doing there?
Devon: My wife and I have always had a heart for orphanages.
Andrew: Hmm-mm.
Devon: When we lived in California, we originally got involved with an orphanage in Mexico. It really grabbed a hold of my heart. We wanted to really expand that, so we began working with a network of orphanages in Indonesia. We became connected, loved what they were doing there. Loved to see lives change. There was a moment that I remember that one of the very first time I went there. You meet the different orphans, there was a boy there. I can’t say his name, he was Indonesian. He had the classic picture when they brought him in. His stomach was distended, and the flies were around his eyes. It was heart breaking picture. They had him at the orphanage there. He was being taken care of. I remember this kid, and we went back a year ago and they actually had him up and graduating high school. They were interviewed it, and they were giving everyone it. Tell them what your dreams are, tell them what you are going to do. The boy stood out, and looked at all of us. Looked us right in the eyes, and said I am going to be the next president of Indonesia. When he said that, I believed him. I give myself goose bumps. I really genuinely believe he is going to be the next president. To be able to see lives change, and to be able to impact others. When I was talking with your producer, I was saying I think it’s so important for entrepreneurs to not just focus the money. You said you can call the bank, and listen to it over and over again. But a lot times you can’t even spend the money. What are you going to with it? It is awesome, but how are you really going to impact the world? So you have to have the why, behind the what. Simon talks about that, and always…
Andrew: Simon Sinek.
Devon: Yeah, Simon Sinek. Why do you do, what you do? What is underline? What is the motivater? Then at the end of the day, if it is just about putting more zeros in your bank account. The well is going to run dry eventually inside. To be able to change the world or impact the world. I am very passionate about that.
Andrew: You can tell Jeremy there was one child who had a heart condition. Most people would say, “Oh, I feel bad for him.” You were able to do what?
Devon: It wasn’t just me, it was friends of ours as well. We were able to get her out of Mexico. We were able to do whatever they do to hearts to fix it.
Andrew: To fly him out, into a hospital.
Devon: Yeah, fly her.
Andrew: Fly her.
Devon: To Mt. Sinai, I think, in LA. They did, and she is just fantastic now. I think she’s about 23 now and at the time she was 17. They didn’t think she would make it past the year. But now she’s healthy, beautiful, and just living a full life. It is funny because you often think what can I do? At the time we weren’t successful. We were pulling out of ashtrays. But if you’re dedicated, you can figure out a way to help and change anyone’s life.
Andrew: I see, so even back then you started and now you have even more power to do it.
Devon: Oh yeah. I think that’s one of the reasons why we’re blessed. I mean, it just doesn’t happen, right? If you’re just a selfish, self- centered person then all you do is pursue your bottom line day after day after maybe, maybe, maybe you someday reach enough zeroes in your bank account. But, you know, what do they say? How much is enough? They always say oh, 25% more, right? You have to literally, you can’t be someone that says. “Oh, when I have this amount of money or when I have this then I’m going to do something. We have to do something now.” We all have a responsibility. I mean everybody can touch somebody’s life. Everyone can change the world. I think that if you are only focused on yourself well then nothing you do will matter anyways. It will be insignificant.
Andrew: I had a friend who adopted two little boys from the Ukraine and he started his own company. There were times when the company was not doing well and he kept saying to himself my dream was to do so well that I could go back and support the whole orphanage, not just these two kids who happened to be lucky to connect with me. That, I saw, would keep him going when he should have probably dropped out and gotten a great job. Did you have any similar situations where when there was nothing left in you there was this vision that said hey, go do it for that. (Inaudible).
Devon: Yeah. You know, it was funny. A little bit of a different side because I actually had that revelation after I had become successful.
Andrew: I see.
Devon: What had happened was once you kind of become successful, like you said, you call the bank account and you’re like, “Oh, there’s enough zeroes in there. I’m good, right?” Well, you can get lazy then. All of a sudden you can go you know what, I’ve got enough. I’m good to go. That’s when I got convicted and said wait, how much is enough? Because it’s not about me. Now it’s about doing stuff for others. Making sure that all of our employees are taken care of. Making sure that they have an opportunity to grow. Making sure that revenue that comes in can get dispersed out and that you can make a difference. It was kind of the same side of that story that you just told but the other side. It was after I became successful I thought. You have a tendency to be lazy and I’m like no. I can’t be lazy. I have to stay motivated because I have a purpose.
Andrew: You said earlier that in all of your other businesses you had a subscription recurring revenue model. What other businesses have you launched then?
Devon: Well since that time I have another company that what we do is lead generation for anyone that wants us to do phone work. Figured out we were pretty good at the phones. People are like well, jeez, I can’t set appointments. I can’t get new customers. We would do lead generation for them. What’s great about that is once you have that customer literally it should be month after month after month. That’s one of my companies.
I have another company that does background screening. You’re about to hire 10 employees you want to check their references. Find out what they say is true. We do background screening.
Another one of my companies is an Internet startup that I’m invested in. I’m not nearly smart enough to explain it to you. But I actually really like the model. It’s kind of a who’s who in town, the best of, you know, where it rates different companies. Not quite like Yelp but it has some similarities to Yelp.
Andrew: I’m sorry, go ahead. The businesses that you’ve started, are they all selling to the same groups of people?
Devon: No, they’re not. But they all have a call center component.
Andrew: Got it. I see. You don’t know fully how to explain what this company is that you invested in but you still invested in it. What was it about it then that made you say I’m going to invest even if I can’t tell my friends at dinner what it does fully?
Devon: Yeah, so I was kind of exaggerating. I can tell you I just didn’t know if we could fit it into the interview. What it does is it rates companies against each other. Who has the best Philly cheese steak in town? Then it says well Joe’s has got the best Philly cheese steak in town because they’ve got the most social media votes. Anyways, that’s kind of what it does. But what captured my mind is number one it’s reoccurring value. But number two there’s a call center approach to it where I know that the price point on it is low enough that it’s something that we can move over the phone, via call center. When I saw that I had a call center component, that’s what got me excited about it. This is kind of my take on start-ups, again, anybody can have a good product, but how do you move it, and is it something that can be moved? I knew that was a product I could move.
Andrew: If you can pick up the phone, then you have the life in your hands, you have your destiny in your hands.
Devon: Exactly.
Andrew: How many people do you have making phone calls?
Devon: With the company we’ve been referencing the whole time, we have just cleared over 500. I can’t take credit for all of that. Since I’ve given up the reigns as president of the company, they have added, I think, 200 in nine months.
Andrew: It’s really growing.
Devon: We just got an award for being one of the biggest growth hirers, which, to me now, is more exciting than any other award we’ve gotten because that means that we are being able to, again, impact people’s lives and give them an opportunity, a job, and let them grow and prosper. So I’m thrilled with where it’s at.
Andrew: Let me do a quick plug and then I want to ask you one question that I think people in the audience are going to want to hear the answer to. The plug is, of course, for Mixergy Premium. Mixergy Premium has 800 interviews that are exclusive to Premium members and I hope you guys sign up by going to MixergyPremium.com, where you can hear how businesses have started through the stories of the entrepreneurs who built them. You can hear about the lows, how they overcame the lows, how they come up with their ideas, and just really absorb their way of thinking by listening to those interviews. But we also have about 100 courses, also taught by entrepreneurs. If you listen to this interview and you said, “I like cold calling. Let me suggest one course that was taught by an entrepreneur who was actually listening to me here for years at Mixergy. He emailed me and said, “Andrew, you’re not picking up on this one thing. You hear it over and over in all of your interviews, and you’re not doing anything about it.” I said, “I don’t get what you’re saying.” I kept going back and forth and then I finally said, “Get on the phone and explain it to me.” He said, “Andrew, I couldn’t wait for customers to come to me. I started picking up the phones because I heard all these entrepreneurs at Mixergy were calling customers and that’s how they got customers and learned what to build,” and so he said, “I figured out for myself,” and he volunteered to teach it to other people in the audience.
The reason I wanted him to do it is because he opened my eyes to it, and also because he is not the guy who you think would be comfortable on the phone. In fact, he told me he is much more comfortable developing. He’s more of a programmer-type, more of a geek like us, than the confident salesperson that we think is going to make sales. He showed me how he created a system and how he built it up and how it worked for his company. Then James Kennedy showed us a process that, anyone who is listening to us can use. It’s directly aimed at entrepreneurs who are in a text space, who have heard about cold calling, heard about talking to customers, even for customer development, and were going to try it for themselves. This is where you start. Go to MixergyPremium.com and take James Kennedy’s course. If you’re a Premium member, it’s in your packet, just go and watch it. If you’re not, I hope you go and sign up right now. It’s priced incredibly low, and the value is there, as you see when you watch James, and any number of the dozens of other courses, and hundreds interviews we have, at MixergyPremium.com. All right. Here’s the thing, people got a lot from you, but we’re kind of eager for more. Where do we learn from you? Can we email you and can we connect with you that way? I know you’ve got a blog where you write about this.
Devon: Yes, I have a blog. It’s called LifeUndefeated.com. When I was going through the process of looking for outside help and perhaps, a (?) event, I realized how lonely it is for entrepreneurs, and how very few people there are that you can talk to. I put it out there. You can actually email directly on that. It’s LifeUndefeated.com.
Andrew: LifeUndefeated.com. I’m looking at it right now. On the site there is a place where they can connect with you. There is a blog here. I had to choose management staff, where you are, be all there, and what kind of metal are you made from. Great place. I always say to people, if they’ve got any value, they should connect with you and say, “Thank you,” at least. Earlier today, I saw Lewis (?), who was a past interview. We didn’t just get a Thank You note, but he was so grateful for someone in my audience to say thank you for teaching on Mixergy, that he took a screenshot and he posted it everywhere. I saw it on Twitter and Facebook. Guys, never hesitate to just say, “Thank you.” Most people will say, “Give me something,” or, “Would you invest in me, or this other company,” or, “Give me advice.” Start off by just saying thank you. Never underestimate the power of doing that. I’m going to start by doing that right now, Devon. I’m going to say thank you for doing this interview, and thank you for being so open about how you built up your business.
Devon: Thank you, and thanks for making me feel at ease. I was a little nervous.
Andrew: How was the pre-interview process with Jeremy?
Devon: Great. When I did it with Jeremy, I didn’t even know what I was going to say. Then he kind of went through some questions and got me talking. Then I was two cups of coffee into it, and you probably couldn’t have shut me up then. It was great. It really made me feel at ease. You guys are a class act and I love it.
Andrew: Thanks.
Devon: Thank you so much.
Andrew: That’s the goal. I always felt bad when at the end of an interview someone would say, “Andrew, the first 30 minutes I was too nervous to tell you the real stories and then the last 30 minutes I wanted to last longer and longer.” So we created a pre-interview process where we can get the great stories out as soon as you start. We hit it big and we get people’s attention and give them a lot of value. Thank you for going through that process. Thank you for giving this interview. Everyone, thank you for being a part of Mixergy. Bye, guys.
Devon: Thanks, Andrew. Bye.
